The government plans to rack up Rs 1,224 crore by selling equity shares in the HUDCO's initial public offer (IPO) that will hit the capital market on Monday.

State-owned Housing and Urban Development Corporation (HUDCO), a 'Miniratna' firm which provides loans for housing and urban infrastructure projects, will launch the IPO on May 8 where the government is offering 204,058,747 shares for sale.

HUDCO has fixed the price band of Rs 56-60 per equity share. The issue will close on May 11. "We will raise about Rs 1,200 crore at upper band. Money will go to the government of India," HUDCO chairman and managing director M Ravi Kanth told reporters here.

The government will dilute 10.19 per cent of holding through this IPO, he added.

The central government has set an ambitious target of raising Rs 72,500-crore from disinvestment in the current financial year, 2017-18.Kanth said the company had an outstanding loan of Rs 36,385 crore as on December 31, 2016 and highlighted that it has been able to contain its NPA level despite turbulence in the financial market.

HUDCO's CMD said the company will focus on housing finance business, particularly affordable housing segment.

He said the new real estate law will help the overall sector including HUDCO. "Our money as well as investors money will be safe now."HUDCO's Director (Finance) Rakesh Kumar Arora said, "This is the first IPO under the disinvestment process since 2012,"

The company has appointed IDBI Capital Markets, SBI Capital Markets, Nomura and ICICI Securities as the book running lead managers to the issue. The shares of the company are proposed to be listed on the BSE and the NSE.

Out of total outstanding loan of Rs 36,385 crore as on December 31, 2016, HUDCO has financed 69 per cent to urban infrastructure projects and 31 per cent to housing sector.

During the April-December period of last fiscal, the company has disbursed over Rs 20,000 crore and disbursed Rs 3,748 crore loans.In the entire 2015-16 fiscal, the sanction loan amount and disbursal stood at Rs 30,700 crore and Rs 8,200 crore.

HUDCO posted a net profit of Rs 496 crore over a total income of Rs 1,169 crore during April-December period of last fiscal.